Cochin order book bolstered before proposed IPO

India?s biggest shipbuilder under state control, Cochin Shipyard Ltd, will likely get a valuation boost after receiving orders for four vessels from government-owned Shipping Corp. of India (SCI) ahead of a proposed initial public offering (IPO) of shares.

Cochin Shipyard, fully owned by the government, received the orders at a time when competing shipyards are struggling for orders during the global slowdown. “New orders are not coming, so we need to keep the yard occupied,” said a shipping ministry official. On 4 June, SCI signed a contract with Cochin Shipyard for building two anchor handling, towing and supply vessels with an option for two more similar ships. On 9 July, SCI signed another deal for two platform supply vessels with Cochin Shipyard.

Cochin Shipyard is one among a list of state-run firms identified by the government for an IPO. The yard already has the backing of the shipping ministry to launch an IPO to fund an expansion plan worth Rs800-1,000 crore. Money raised through an IPO will go to the company and that from a secondary share sale to the government.